Please don’t read this if you aren’t interested in knowing what I wrote for my sociology paper. (Or if you aren’t interested at all in economics, for that matter.)
The idea of stocks first cropped up among Dutch, British and French ships who were keen to explore territories beyond their homelands. With few explorers able to afford the exorbitant sums of money required to have an overseas trade voyage, companies were formed to raise money from investors (Ritchie, 2009). Since then, stocks have evolved dramatically: today the major stock markets in the world hold trillions of US dollars worth of capital (Bespoke Investment Group, 2008), and have the ability to determine who ends up on the cover of Forbes magazine or, just as often, in jail. Economists, however, have mostly struggled with the unpredictability of the markets, especially in recent times, where the subprime mortgage crisis has plunged the world into a severe financial crisis. Volatility continues to be the main topic of research amongst economists, even after years of analysis and big-money mistakes. In this paper, I attempt to use social network analysis to understand the phenomenon of stock market movements.
Continue reading →